Brazil Central Bank presents a proposal for public consultation

The forthcoming regulation aims to govern the delivery of these services, focusing on the following primary objectives:

• Mitigate risks for customers of financial services by ensuring transparency and security in a regulated environment;
• Increase the stability and efficiency of the financial system by clearly defining company responsibilities and aligning business models with regulatory standards.

Currently, these partnerships are regulated by private contracts between institutions authorised by the BCB (service providers) and various entities (service takers), typically commercial businesses.

Conditions for delivering BaaS services

In this context, the proposal outlines a framework that includes concepts, responsibilities, rules, and conditions for delivering BaaS services, built upon the following pillars:

• Definition of 'BaaS service provision' along with the entities involved in the process (service provider, service taker, and client);
• Clarification of the responsibilities of service providers and borrowers;
• Specification of the range of services that may be offered; and
• Requirements for the contracting of services.

The proposed normative structure aims to upgrade current business models by ensuring greater security and transparency in contracts, including individualised customer accounts and clear service provider information. The Public Consultation Notice No. 108/2024 seeks feedback on general improvements and highlights specific services for subsidies, such as:

• Payment instrument accreditation, 
• Initiation of payment transactions (ITP), 
• International transfers (eFX), and 
• Offer and contract credit operations. Additionally, it requests public opinions on the adaptation timelines for existing contracts to comply with the upcoming standards, considering the complexity of various business models.

The proposal for the normative act can be found on the Participa + Brasil Portal and the Central Bank of Brazil's website under 'Financial Stability.' Suggestions can be submitted until January 31, 2025.